China key to Taiwan energy crisis

By John Mathews and
Hu Mei-chih 胡美智

At present, Taiwan is embroiled in a debate over a referendum to decide whether to complete the Fourth Nuclear Power Plant in New Taipei City’s (新北市) Gongliao District (貢寮), which is currently under construction. The debate is focused on the risks of using nuclear power on an earthquake-prone island — with the 2011 disaster at the Fukushima Dai-ichi nuclear power plant in Japan being used as a point of reference — and the supposed costs of moving away from nuclear energy in terms of electricity prices and the reliability of the nation’s power supply. The nuclear debate has also become side-tracked by a longstanding debate over the legalities of the referendum process and whether the government can be trusted to frame referendum questions fairly.

What is missing in this debate is the recognition that the nation has more to gain by promoting renewable energy industries than by sticking with the nuclear option, in terms of energy security and building export platforms.

Chien Hsi-chieh (簡錫堦) (“Taiwan needs green energy policy,” April 8, page 8) is right in saying that Taiwan should develop “green” energy, but the example that the nation should be following is not Denmark, but itself.

Taiwan is justifiably proud of its achievement in building three “pillar industries” in semiconductors, flat-panel displays and PCs. Now it should be getting ready to use the institutional and entrepreneurial strategies perfected during its earlier economic development to add a fourth pillar industry in solar photovoltaics (solar panel electricity systems, or PVs) and other renewable energy sources.

The model for such a strategy is close at hand: China engages in the world’s most strenuous and dedicated promotion of renewable energy industries through an extraordinarily successful industrial policy. Renewable energy industries were considered marginal players until China got serious about promoting them in the mid-2000s. In one sector after another — first in wind, then in PVs, tomorrow probably in concentrated solar power (CSP) — China has relentlessly promoted a green option to balance and complement its pursuit of “black” coal or oil-fired energy.

China’s industrial policies are grounded in the need to build energy security and not be reliant on fuel imports from unstable countries. These policies have have been spectacularly successful and Beijing now exports its renewable energy products to many parts of the world. It is also exporting its green energy development model to other countries such as India and Brazil, and the Chinese model is being emulated by advanced countries such as Germany.

Whatever one thinks of China’s authoritarian political system, its relevance as an energy model for Taiwan is undeniable. China not only has an effective industrial policy that supports the development of new industrial sectors, but it has also been successful in pushing for drastic upgrades of its power grid so it can accommodate a variety of decentralized renewable inputs by making investments in information technology (a “smart” grid) and high-tension long distance high-voltage direct current power lines (a “strong” grid).

By contrast, Taiwan continues to be entangled in a debate over a nuclear option that Germany and many other countries are leaving or have left behind. This is a very different outlook of the future than that of Taiwan Power Co and other big firms, who anticipate that renewable energy sources will be costly and unreliable. China knows full well that the opposite is true.